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FTA talks with US without domestic private sector termed not good - UAE

Khaleej Times, UAE

FTA talks with US without domestic private sector termed not good - UAE

27 June 2005

ABU DHABI - Chairman of the Emirates Bank Group Ahmed Humaid Al Tayer has expressed disappointment about not involving the private sector in Free Trade Agreement (FTA) negotiations with the US, fearing it may turn out to be an ’agreement of mass destruction’ for the domestic economy.

Speaking to reporters, after inaugurating, a new branch of the Emirates Bank International on the Najda Street in Abu Dhabi, Ahmed Humaid Al Tayer, a visionary business tycoon strongly reacted to the FTA negotiations, which he viewed would put the country on a greater disadvantage.

In what is believed to first ever strong comments on the issue from a private sector business leader, he described it as an ’inevitable evil’. "But, we have to study all US requirements to find a possible solution aimed at minimising any negative aspects in the future and to get the best possible thing out for the country", he said.

He continued, that any agreement should take into account the capabilities of the national financial institutions and industry because it would be unreasonable if "we allowed these giant US banks or multinational corporations in the country", adding that "with their strong technological back-up and expertise, their competing with national banks would be a mismatch".

"It would be like a basket ball match between the UAE and the National Basketball Association (NBA)," he compared the disadvantage the country’s businesses would be having after the conclusion of the FTA with the US.

"It is possible we would put explicit regulations for each economic sector, in a way that guarantees a balance and interest of national institutions and private sector at large in the first place," he said.

He said that unlike in past when at the time of joining the WTO fold, industry was taken into confidence. But, this time around private sector was kept in total dark, he said." The stakeholders were not taken into confidence and were not consulted and enough time was not given to re-adjust in the new scenario, Al Tayer opined.

"We have our own views and reservations on certain important economic issues we wanted our concerns to be duly incorporated and addressed to our satisfaction in the larger interest of the economy", Mr Al Tayer said, adding that the business community should have been at the centre-stage and an integral part of the whole FTA negotiation process.

He said that he has no clue, what cooking up there, as industry is not consulted before finalising the agenda for negotiations", Mr Tayer said, in his fiery observation over the UAE-US talks which will enter its third round in August.

He was of the view that Western banks wants to thrive on GCC oil money and huge liquidity.

Voicing his concern over another burning issue, which tantamount to a conflict of interest, Ahmed Humaid Al Tayer pointed out that some members of the Board of directors of the Securities and Exchange Commission (SCA) are also on the BoDs of some leading companies where they safeguards their business interests. "It is against the objectives of transparency and fair-play and would do no good to the economy", he said, urging for the corrective measures be taken by the corporate watchdog.

He said someone is sitting on the BoD of a Bank or a company and on the other hand he is sitting on the BoD of watchdog where matters regarding his company’s comes for approval, it could creates doubts over the transperency of the whole activity, as if they are on the two side of the arbitration.

He was of the view that board of directors of a company should recommend to the EOGM, in clear terms the amount of premium to be charged on Right shares and should not leave on the shareholders to decide on.

About EBI performance during the second quarter of the year, he said its profitability has risen by 50 per cent to Dh650 million while comparing with same period last year.

He said that EBI and Emirates Islamic Bank each will open ten more branches, in the country by the year-end, after the Central Bank of the UAE allowed banks to open ten more branches. Though, he feared the country has more banks than they are actually needed. "The solution is consolidation and merger, which in fact, is a challenge of tomorrow, the sooner we think on it, the better it would be for the banking industry", he said.

Outside the country, the Bank has sought permission from the respective Central Banks for opening branches in Qatar, Kuwait, while recently it opened a branch in Riyad.

The EBI is working on a joint venture proposal to set-up a bank in Syria with the partnership of Qatar and Lebanon Banks.

Earlier, he inaugurated the branch in the presence of top officials of the Central Bank of the UAE, business executives.